Volkswagen Gets Embroiled In Another Dispute

Two suppliers of parts to Volkswagen accused the German carmaker of cancelling contracts without explanation or offering compensation which resulted in them stopping deliveries.

ES Automobilguss, which makes iron parts needed to make gearboxes, and CarTrim which makes seats are seeking compensation after they claimed they lost revenues due to the stoppage of deliveries by Volkswagen.

Volkswagen is cutting working hours of more than 10,000 employees at its headquarters in Wolfsburg and reducing output at two more German plants. The reason the German carmaker said was because of short in supply of parts.

The German companies said in a statement issued through parent company Prevent DEV GmbH, "Because Volkswagen declined to offer compensation, CarTrim and ES Automobilguss were forced to stop deliveries."

The parent company for the German part suppliers said it was only those two divisions which have disputes with Volkswagen and it hoped the hostilities will be prevented.

Meanwhile, Volkswagen has asked the court to force Car Trim to resume deliveries of parts or it will have its executives risk of being jailed. Even the gearbox parts are in shortage in supply which has resulted in the change in working hours at Kassel, another German plant comprising 16,000 workers produce gearboxes, auto parts, and electric engines.